Digitization Inside and Out of the Boardroom

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digitization-4-16-18.pngAs global businesses and markets are caught in a seemingly perpetual cycle of disruption and adjustment, company leadership and directors are tasked with finding new, innovative ways of communicating and working with shareholders in an increasingly complex and fragmented landscape. This is even more important given the massive technological advancements within the last decade, which have not only shifted the ways in which companies operate, but the means in which businesses and investors convey and share information.

Recent advancements in technology have transformed everyday business processes through digitization, which, in turn, has made cybersecurity a top priority. Moreover, they have made the world a much more connected place, facilitating business at a faster pace than ever before. To help company leadership adjust, new technologies have been developed to help directors and leadership teams improve collaboration and workflow.

Digitization
Today’s boards are going paperless, and the reality has become indisputable: directors are turning away from printed documents in favor of digital information that is easy to share and accessible on mobile platforms, like board portals.

Through digitization, directors are now accustomed to heightened levels of speed and efficiency across all business processes. With board portals, corporate secretaries and meeting managers are able to streamline board book creation and tighten information security. The benefits to this technology are clear: easy access to digital meeting information with user-friendly tools for assigning tasks, approvals, consent votes and secure messaging.

We have also observed a growing trend driving increased global demand for board portal solutions: the need to collaborate and share confidential information and documents across internal and external teams in a highly secured environment. The C-suite executives who already use our board portal tools for director-level collaboration are now expanding that capability across their organizations, all through a single sign-on service.

Cybersecurity
As businesses shift to digital platforms, data security plays a much bigger role. Companies must closely scrutinize how sensitive information is handled due to the risk of breaches. Cyberattacks are common and can result in significant financial and reputational damage; cybercrime damage costs are expected to total $6 trillion annually by 2021, according to CSO. This makes it especially important for boards and company leadership to take a strategic approach to data protection. Information is being shared in more rapid and innovative formats, and the methods in which boards communicate with shareholders will need to prioritize safety along with accessibility.

Protecting sensitive information should be at the top of a company’s concerns. This is why solutions should comply with strict encryption standards, multi-factor authentication and a completely cloud-less data storage system. Companies can also leverage machine learning and artificial intelligence (AI) to navigate and secure large volumes of data. These technologies can monitor and detect network anomalies that signal potential attacks and prevent further access before data is compromised.

Globalization
Due to the digitization of communication channels, we are now able to connect and do business in seconds with people halfway across the world. As technology brings us closer together, it breaks barriers to information accessibility. This ease of information exchange has impacted investing by virtually removing any impediments that once stood in the way of certain markets.

Increased ease of access to information around the world means companies, and particularly company leadership, should ensure key information is digestible for all stakeholders. That’s why being equipped with full translation services for common languages can be advantageous.

Moreover, as globalization continues to facilitate business and investing opportunities, shareholder bases are broader and more diverse than ever before. With the rise of passive investing, companies lack a level of transparency that allows them to know who their stakeholders are. For this reason, it is necessary to take advantage of tools and technologies that provide actionable insights into passive investment data and provide a more comprehensive picture of shareholders.

Looking Ahead
As technology continues to augment the ways in which companies operate, boards need to keep pace, ensuring they are communicating with their shareholders in the most efficient and preferred methods possible.

Improving Governance By Using Board Portals

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board-portal-12-11-17.pngIf you counted the minutes in a day that you save because of technology, it would add up to quite a bit. With so many issues confronting financial boards, adequate time for strategic planning is a valuable commodity, so time is exactly what busy board members of financial institutions need.

Changes in the economy and the financial markets have complicated matters for boards of all sizes. Larger banks and conglomerates are finding it difficult to adapt to increasing regulations. Community banks are finding it harder to compete with larger banks. At the same time, financial institutions are finding it difficult to provide the level of technology that their customers want and need, in addition to other significant strategic issues.

Board portals help directors focus more of their time on strategic decisions. These portals have all of the features that directors need, and ensure that the information they need is available to them wherever they are, while also remaining secure.

Preparing board handbooks manually with paper copies and binders places a huge burden on the board secretary. Every time a board meeting approaches, the secretary spends countless hours copying and collating documents, and filing them into the proper sections of the handbook. Updating a board portal requires some work on the part of board secretaries, but they only have to upload a document one time. And secretaries can limit access to certain documents only to the people who need to view them.

In addition to the time savings, board portals provide material and environmental savings. Financial institutions save the cost of reams of copy paper, other office supplies and the labor to assemble board books. The savings can net banks upwards of $1,100 per board meeting. Board portals are environmentally friendly as well. Banks and credit unions contribute less paper to the landfills, and they expend less electricity to produce it. According to a recent analysis by Diligent, boards of banks and credit unions can save up to $10,000 a year by using a board portal.

Board Portals Provide Mobility and Improve Security
There’s nothing worse than the panic that a director of a bank feels in learning that an important piece of paper is missing from the board book. This could happen easily enough with busy board members who travel often for business and pleasure as they juggle suitcases and briefcases in cars and on airplanes. Board portals let busy directors access their board documents with ease on any electronic device, including laptops, tablets and phones. Directors no longer need to lug heavy board books through busy airports and risk valuable information getting into the wrong hands. Most board portals have a double authentication process with a user ID, password and scrambled PIN code, so even if an electronic device gets lost or stolen, sensitive board information remains safe and secure.

Choosing a Board Portal
While board portals are generally intuitive and user-friendly, some directors who are not adept at technology may find that they have a learning curve. But most board directors adapt quickly with a little training and experimentation.
Board portals for banks are a single tool that stores meeting materials, communications, bylaws, archived documents and more in neatly arranged files. Many of the features that board portals provide are of great use to directors, particularly board rosters, board biographies, electronic surveys, voting history and shared notations. Many portals also have a built-in time tracker, so directors know how much time they are spending on board business. This feature can help boards evaluate whether directors are dedicating enough time to board service to comply with proper governance principles. Once they get used to the tool, board members appreciate the ease of posting news items, linking documents, sharing agenda items and calendars, and using the chat and email features. Premium products may also include offline capability, which is an important feature for many bank board directors.

Look for a board portal product that is easy to use and that has knowledgeable customer service support that is available around the clock. As with most products that consumers buy, less expensive board portals aren’t necessarily the best value. Board directors will spend a significant amount of time on the portal, so it’s best to conduct a thorough review of the features, usability, speed and functionality before investing in a portal. The right board portal will do all that you need it to do and more.

Six Tech Trends for 2017

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tech-trends-4-17-17.pngFor capital markets participants worldwide, Nasdaq operates as a pioneer in maintaining market resiliency and mobilizing the latest practical technologies to strengthen and optimize the business performance of our partners and, most importantly, our clients. Amidst a rapidly changing economic and political environment, the technological advances used in financial services during 2016 reached staggering new heights by year-end.

As a financial technology company, we are especially excited about what is in store for 2017. We believe the following technology trends will have a significant impact on the capital markets this year.

Machine Learning and Artificial Intelligence
Machine learning and artificial intelligence will cross-cut almost everything that we do, and it will be applicable across the board—from helping customers to trade to market surveillance. We are bringing in nontraditional data sets including email and text messaging, sentiment and macroeconomics data, and we are mining log files from different systems for insights. The technology will be used to calculate and generate indices and exchange-traded funds. It will also be integrated into exchange matching engines (the system that matches buy and sell orders) so that it can make certain trade decisions.

Collaboration Tools
Secure collaboration software and online portals will play an important part in how corporate directors and leadership teams work as compliance, board management and the need for a central document repository have become increasingly vital business propositions. These web and mobile app-based tools are typically designed with multiple security and functionality features to provide greater governance, engagement and transparency throughout an organization. As more companies begin to integrate collaboration software into their business workflows, the secure sharing of critical information will become more simplified.

Cloud Computing
Cloud providers are taking security seriously, and we anticipate that the financial cloud will soon be more secure than most traditional on-ground data centers. That would potentially allow us to make sensitive information more broadly available than on traditional, centralized databases. Exchanges need to comply with rules and regulations on fair and equal access for clients, so moving front-office applications to the cloud necessitates some technology changes. Running middle-office and back-office applications in the cloud is more straightforward, but in 2017 we will continue work to address the remaining security concerns regarding data separation and customer access to data.

Data Analytics
The ability to mine data, normalize it, update analytics in real time and present it in a consolidated view is a source of competitive advantage. We are now seeing a seismic shift across the industry with machine learning and artificial intelligence enabling users to eliminate bias in the analysis and discover new patterns in the data.

There will be a diverse set of use cases for data analytics within financial services, including its application in the investor relations function, where analytics can assist the IR team by aggregating specific investor data points, filtering institutional investors by the positions they hold in your company’s stock and identifying specific investment characteristics.

Mobile Technology
Advancements in mobile technology have changed the way business professionals collaborate and access information. A new generation of cloud-based applications has simplified information sharing across device types. For example, we have combined mobile technology with other technologies—particularly cloud and blockchain—to enable remote proxy voting. To some extent, financial firms have been laggards in adopting mobile technology because of the security concerns, but addressing those will drive increased penetration.

Blockchain
Blockchain technology could create important efficiencies in position-keeping and reconciliation. For cash-settled securities, it could accelerate the clearing and settlement time frame from three days to same-day, significantly reducing risk in the system. Collateral could be moved around quickly and easily. On the settlement side, blockchain could complement several services, including managing payments and cash, transferring securities, facilitating collateral and tri-party arrangements, and securities lending.

It is clear that financial services in 2017 will evolve rapidly as new technology is integrated into the marketplace. These technologies will change how financial institutions manage their infrastructure, interact with one another, and ultimately, how industry leaders scale and grow their businesses. We are excited to see how the year unfolds.

The Case for Board Portals: Saving Money While Saving the Environment

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5-16-13_Diligent.pngIn the past, the decision to adopt portal-based solutions for boardroom communications was often driven by efficiency. Banks sought to minimize the manual labor associated with paper-based board pack production and create a seamless flow of critical information to board members. Most directors adapted quickly to digital options. And why not? Doing so allowed them access to volumes of board materials on iPads or tablets and near real-time updates for swifter and better-informed decision-making. For the company secretary, the advantages were equally compelling: With paper-based production, the manual effort of printing, collating and delivering board packs is immense compared with electronically developing and disseminating materials.

Now, however, it is becoming increasingly clear that the greatest benefit of portal approaches goes well beyond the qualitative. Digital solutions can also significantly cut costs. Consider the case of Huntington Asset Services, a mutual fund service provider for clients with combined assets of more than $45 billion. Board meetings for Huntington’s Valued Advisers Trust generated, on average, 1,000-plus page binders that were four or five inches thick. Although the company’s primary motivation for adopting a secure board portal solution was efficiency, the money managers soon discovered that their own capital went a lot further with a portal. In fact, switching from a paper-based approach resulted in a savings of almost $10,000 a year for two funds on original costs of almost $40,000, or 24 percent. The same level of savings can be expected for each additional fund that adopts the portal solution. Beyond sheer material savings, Huntington Asset Services also notes that they save at least two days in the development and delivery process, and resources are freed up to focus on areas of more strategic importance.

Similarly, FirstRand is a leading international financial services group. FirstRand conducts a robust calendar of meetings—upwards of 600 a year between its main board and all of the subsidiaries requiring the production of more than 8,700 individual board packs for its directors. Moving from paper-based to digital production of boardroom materials was prompted at first by a need to mitigate the tremendous burden inherent in manual report processing.

After using Diligent Boardbooks for nearly a year, FirstRand measured savings obtained by moving to the solution. The bank discovered that the portal had cut their costs by nearly half. Previously, FirstRand spent almost $1.5 million per year on the production, assembly and delivery of board packs. After adopting a portal, the company achieved a saving of $748,000 in their first year alone, a reduction of an estimated 50 percent of overall costs. The majority of these savings were attributed to a 78 percent reduction in staff costs. And more than four million sheets of paper—the equivalent of 527 trees—were saved last year as a result of switching to a paperless solution, so there was measureable environmental impact as well.

A clear case for digital

While banks often initially adopt board portals to gain efficiencies, many also discover significant bottom-line savings. And they have proven that there is a clear business case for going digital. In many cases, a secure board portal solution can literally pay for itself. 

Going Paperless in the Boardroom

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If your board is considering moving away from paper and towards the convenience and security of tablets, this video from BOARDVantages’s Eastern Region Director Aisha Wallace-Wyche can help guide you in the process. Aisha discusses both the benefits and obstacles of going paperless, as well as how to set a transitional strategy in place that ensures your directors will be adequately prepared for the switch. 

Highlights include:

  • The advantages of going paperless
  •  Instituting training programs for devices
  • Setting a strategy for success

Click on the arrow to start the video.


Five Must-Haves for the Paperless Boardroom

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wastebasket.jpgIn the past decade we have witnessed the wholesale transformation from hardcopy to digital for nearly every type of media. Entire industries, from film and music to publishing have been completely upended by digital technology.  Yet in the corporate world, many cling to manual processes and paper-based content distribution. Nowhere were the vestiges of tradition more firmly entrenched than in the boardroom.

This is not to say that these hold-outs are technology luddites. On the contrary, many corporate secretaries have sought change, but the underlying technologies were not ready for primetime. Only recently have secure hosted applications, ubiquitous network connectivity and mobility caught up to delivering on the promise of “going paperless.”

To understand why the digital board book is a transformative opportunity for general counsels and directors, we need look no further than the iPad. The iPad ushered in a new era. With its dramatic revision to the user interface, the iPad is ideally suited to the dense information boards need to review in an intuitive and accessible manner. Most importantly, the iPad’s readability and portability makes the online board book a better experience than its traditional printed predecessor.

Simply put, the iPad settled the debate about which device to use and took concerns about directors’ digital literacy off the table, and we can turn our attention to how a paperless board room fulfills the board’s needs. It’s worthwhile to keep in mind that in the pre-iPad era, tech-savvy directors had always been interested in basic online access to the boardbook, a technically uncomplicated task. A number of solutions existed to fulfill that need. But in the post-iPad world, the goal has grown more ambitious. Directors now want to do all their board work on the iPad, not just document review but also written consents, e-signatures, secure email and other tasks.  In other words they are ready to go 100 percent paperless. So with that in mind, here are five technology must-haves for a successful outcome:

1. Online-Offline Syncing: Directors carry their iPads wherever they go and rely on them for access to their board materials. Not unreasonably, they expect ready access to those materials even if they’re out of Wi-Fi range.  An essential requirement is briefcase technology that syncs content seamlessly between online and offline so any notes made while offline are immediately available when a director is back online. Also, to ensure directors have the latest information, the system lets the general counsel push new materials directly to the director’s briefcase.

2. Protect Against Discoverability: The iPad is a groundbreaking mobile device, but there is a tension between mobility and the risk of discoverability. Having the board book on a director’s iPad creates a potential legal exposure because directors may forget to purge this information. The way to eliminate this risk is with a system that centralizes control with the general counsel so that downloaded content, and directors’ notes, can be purged remotely by the general counsel, without relying on the actions of directors. This is akin to the traditional practice of the general counsel collecting and shredding paper board books following the meeting.

3. Map the Paper Process: Board communication is characterized by varying levels of access to sections of the boardbook. For example, what members of the audit committee see is often different than what members of the governance committee see, or outside counsel may be added for a single meeting and then her access rights revoked. In other words, a big part of board communication is about who sees what and when they see it. Today, that control exists with paper. It may be onerous, expensive and slow, but it works.  It is critical then that the portal has an equivalent ability to differentiate access between various users. In the portal this comes in the form of a control matrix and content segregation.

4. An Experience that is Better than Paper: When you change a long-standing process, you have to offer people an incentive. What you give them has to be better than what they have today. That means the user experience for your directors has to be more engaging and satisfying than what exists with paper. This requires an application that takes maximum advantage of the rich graphics and animation of the iPad to improve directors’ entire boardroom experience.

5. Embrace Two-Way Communication: For years, the board portal was a one-way communication tool. The general counsel distributed materials and directors retrieved it online and rarely communicated back. Now portals are shifting to two-way interactive capabilities that can improve decision-making by providing greater efficiency but also allowing directors to focus on the substantive issues rather than minutiae.

For more information on how to get started, check out this video on Going Paperless in the Boardroom.